Poor HR Practice - Human Right Violation in Handling Trade Union - Case of Nestle India
BRSR (SEBI) AUDIT : HR Practice - Human Right Violation
* Birendra K Jha Certified Social Auditor; Practitioner Social Impact Assessment Audit; Practitioner BRSR (SEBI ) Audit. EMail: birendrajha03@yahoo.com
Nestle India is a SEBI registered entity within top 1000 companies. This entity has to file now BRSR Report to SEBI after mandatory Third Party Social Audit on the BRSR's Principle 5. Anti Trade Union activities are poor HR Practice and clearly human right violation. Nestle Samalkha Trade Union has staged protest against anti Trade Union activities by the management. Like Nestle, Many companies think that Trade Union shall eat away large amount of profit margin. Samsung Electronics Co Ltd, pattern is also anti trade union. For this reason Mr Lee Sang-hoon, the Chairman of Samsung Electronics Co Ltd was sentenced to 18 months in prison for sabotaging the Trade Union activities. The ruling line is clear. Anti Trade Union activities are illegal and punishable offence.
A case from Nestle India is given below ( under title: Nestle India experience ) to understand the nature and typicality of this violation. But before that let-us understand this aspect of HR Practice and human right violation.
In India, by and large, HR Practice orients around anti Trade Union activities. This is "Unfair Labour Practices". The IR Code 2020, Code 84 prohibits employer to commit any "unfair labour practice" listed in the second schedule. This schedule list down activities of any interference with or any attempt to restrain, or coerce, workers in the exercise of their right to organize, form, join or assist a Trade Union or to engage in concerted activities for the purposes of collective bargaining are in the ambit of human right violation and clearly offence under the Labour Law. To restrain this illegal activities SEBI has introduced mandatory Third Party Social Audit on the violation of human right in HR Practices. Social Auditors need to check indicators mentioned below to identify this violation.
Social Auditor check list on the Trade Union violation :
Social Auditor should check following HR Practices as strong indicators working against Trade Union or collective bargaining:
a) False charge sheet and disciplinary conduct against Trade Union office bearers.
b) No engagement of workers or Trade Union in important decision making process.
c) Employees survey on protest against Trade Union formation.
d) False complain about Trade Union in labour departments.
e) Case history of industry against Trade Union blocking activities.
f) Employees protest demonstration proof against management.
g) Proof of industry preventing workers from forming unions.
h) Industry whether refuse to negotiate with a recognized union if letter is given by Trade Union.
i) Legal strikes are suppressed by the industries.
j) Industries create "yellow unions" that are controlled by the HR Department. This do not represent workers' interests. But, it promotes only bogus collective bargaining.
k) Illegal lock down promoted by the industry.
l) Any positive indicator found during interview with the area Labour Commissioner on this industrial unrest.
If any of the above listed indicators are positive. Then deep audit is required by the Social Auditor to identify the degree of the human right violation.
Hon'ble Supreme Court Order On Trade Union:
The collective bargaining is the golden fundamental right of the workmen. Hon'ble Supreme Court of India in following judgements have secured the fundamental right of the workmen:
a) Karol Leather Karamchari Sangathan v. Liberty Footwear Company.
b) Central Inland Water Transportation Corporation v. Brojo Nath.
c) National Engineering Industries Ltd. v. State of Rajasthan & Ors.
d) All India Bank Employees' Federation v. National Industrial Tribunal.
The ILO On Trade Union:
The International Labour Organization (ILO) protects ethical collective bargaining through Convention No. 98. This is global standards, inspiring countries to adopt fair labour policies and recognize collective bargaining as a fundamental labour right. The Article 2 of the Collective Bargaining Convention, 1981 (No.154) of the International Labour Organization states, “collective bargaining extends to all negotiations which take place between an employer, a group of employers or one or more employers’ organizations, on the one hand, and one or more workers’ organizations, on the other, for a) determining working conditions and terms of employment; and/or b) regulating relations between employers and workers; and/or c) regulating relations between employers or their organizations and workers or workers’ organizations.”
Wage Agreement & Trade Union:
In HR Practice this is forgotten that well drafted sound long time "Wage Agreement" is a gateway of Industrial Development. HR needed to be trained how in peaceful environment, workers can be aligned for peaceful collective bargaining. This skill is lacking in HR, wherever trade union unrest is seen. HR is needed to use legal mind for peaceful wage agreement. In India major SEBI listed companies, fear from Trade Union. They think that the organized Trade Union shall eat away their major profit. In order to retain heavy profit, management invest in anti trade union activities. Such companies openly violate the Labour Law and break the fundamental core of the human right.
Nestle India Experience:
Nestle India is a SEBI listed company. This is within top 1000 companies in the SEBI. This company has track record history, where management and Trade Unions have clashed.
Samalakha Nestle Workers Union:
For the Nestle India, the "Grant Thornton Bharat LLP" has audited the BRSR Report 2023-2024. In this Audit Report under Principle 5, report about the Human Right indicator is absent. HR Practices of obstructing Trade Union is clearly Human Right violation and illegal activities.
This union, formed in 2022. This faced obstruction by the management in its registration process. The trade union representatives asserted that forming a trade union is a fundamental right of the workers and in compliance with the Constitution. The Samalakha Trade Union workers had protested against the management in 2023. A demonstration proof is on record.
In Nestle India, on Monday June 5, 2023 track history is seen of employees protest against management on formation of Trade Union at Samalakha ( Haryana). This is essential indicator for the Social Auditor that company is not handling correctly this side of human right protection. The HR Practice needs to be improved with Legal Wage Agreement.
But, absence of such critical incident in the BRSR Report of 2023 - 2024, shows the poor quality of assurance audit. The incident of June 5, 2023 was not measured and investigated. The wide employee resentment, had staged protest at the gate of the Nestle factory located in Samalakha, Haryana.
The June 5, 2023 incident was not only a protest against the management, but an essential indicator for the auditor to measure the degree of the Human Right violation.
This protest was against the management's refusal to grant permission to workers in forming Trade Union. The workers have complained that the management is placing every possible obstacle in the formation of the Trade Union to thwart the registration of the Trade Union at Labour Commissioner's office. This was necessary for the BRSR auditor to endorse it. But this was skipped.
Nestle Mazdoor Sangh (Pantnagar):
This Trade Union is in Pantnagar plant. This Trade Union at the Pantnagar plant, faced resistance from management, including suspensions of union leaders and attempts to block registration. The union now has achieved legal recognition.
Nestlé India’s Trade Union for factories at (Moga, Ponda and Bicholim):
Nestlé India’s factories at (Moga, Ponda and Bicholim) have formed trade unions representing more than 1,200 workers. Earlier the Nestlé India management refused to recognize the union at Nestlé Ponda, Goa, when it was formed in 2001. In November 2008, the unions, demanded the right to negotiate wages. Nestlé India management refused to negotiate. In May 2009 trade union filed a formal complaint against Nestlé for violations of the OECD Guidelines on Multinational Enterprises. In addition weekly peaceful demonstrations at each factory were planned and the rally at Nestlé India headquarter was organized. The Trade Union members in Ponda and Bicholim boycotted all company-sponsored events and refused to work overtime for more than half a year. This compelled the management to review plan on obstructing the collective bargaining. Faced with continuous pressure at local, national and international levels, Nestlé India management finally entered into collective bargaining with wage agreement.
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